Friends Provident has set aside £217million to cover corporate bond loans, an increase of £127million on 2007's reserve.

In its preliminary results for 2008, Friends Provident recorded a life and pensions cash operating deficit of £12million, compared to a surplus in 2007 of £19million.

Trevor Matthews, chief executive officer at the life company, said that the firm has maintained its capital strength due to its "prudent approach to accounting" and its dividend policy. "The company is reorganised, the leadership team is strengthened, and operational momentum is building. We have taken significant costs out of the business, sharpening our competitive edge in the key markets we identified at the start of 2008.

"2009 will be a tough year for economies worldwide, but we will continue to enhance our product range and build a business primed to broaden our distribution and grow market share both in the UK and abroad."

- Pensions Age March 2009

Share Story: